Litigation finance is critical tool for justice

The upcoming New York Senate hearing on legal funding (“Lawsuit lending spotlighted by state Senate“) provides an important opportunity for lawmakers to understand how they can best protect consumers while preserving access to this critical resource.

Legal funding empowers victims to exercise their right to pursue justice by helping them manage everyday financial burdens. Unfortunately, as in any industry, a small number of bad apples can spoil the whole bunch.

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That’s why the American Legal Finance Association has a well-established record of supporting efforts to combat bad actors. For example, ALFA filed an amicus curiae brief in support of the joint enforcement action of the New York attorney general and the federal Consumer Financial Protection Board against litigation-finance firms involved in settlements for 9/11 first-responders and brain-injured NFL players.

New York needs legislation that creates transparency, oversight and accountability. Assemblyman Erik Dilan’s bill outlines clear provisions that will protect consumers by mandating licensure, barring funders from involvement in litigation, prohibiting the use of funds for legal expenses, banning referral fees and requiring funders to provide clear contracts in the victim’s first language.